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Submitted by Patrick Buchanan via Buchanan.org,

As the returns came in from South Carolina Saturday night, showing Donald Trump winning a decisive victory, a note of nervous desperation crept into the commentary.

Political analysts pointed out repeatedly that if all of the votes for Marco Rubio, Ted Cruz, John Kasich, Jeb Bush and Ben Carson were added up, they far exceeded the Trump vote.

Why this sudden interest in arithmetic?

If the field can be winnowed, we were told, if Carson and Kasich can be persuaded to follow Bush and get out, if Cruz can be sidelined, if we can get a one-on-one Rubio-Trump race, Trump can be stopped.

Behind the thought is the wish. Behind the wish is the hope, the prayer that all the non-Trump voters are anti-Trump voters.

But is this true? Or are the media deluding themselves?

Watching these anchors, commentators, consultants and pundits called to mind the Cleveland Governors Conference of 1964.

Sen. Goldwater had just won the winner-take-all California primary, defeating Gov. Nelson Rockefeller, assuring himself of enough delegates to go over the top on the first ballot at the Cow Palace in San Francisco.

But with polls showing Barry losing massively to LBJ, the panicked governors at Cleveland conspired to block his nomination.

Michigan Gov. George Romney and Pennsylvania Gov. Bill Scranton were prodded to enter the race. Scranton would declare his availability in San Francisco with a letter accusing Goldwater of hostility toward civil rights — Barry had voted against the 1964 bill — and of excessive tolerance toward right-wing extremists such as the John Birch Society.

And what became of them all?

Goldwater won his nomination and went down in a historic defeat, but became a beloved figure and the father of modern conservatism.

Of those who turned their backs on Goldwater that fall, none ever won a presidential nomination. Of those who stood by Barry that fall, Richard Nixon and Ronald Reagan, both would win the GOP nomination twice, and the presidency twice.

And the conservative movement would hold veto power over party nominees and become the dominant philosophy of the GOP.

Folks forget. Not only were there “liberal Republicans” and “moderate Republicans” back then, they dominated the landscape. Yet rare is the Republican today who would describe himself in such terms.

Which brings us back to the anti-Trump cabal.

While their immediate goal is to deny him the nomination, do they really think that if the party nominates Rubio, things can be again as they were before Trump? Do they not see that America and the West are undergoing a series of crises that will change our world forever?

Bernie Sanders is not all wrong. There is a revolution going on.

Late in the last century, when Robert Bartley was editorial editor, The Wall Street Journal championed a constitutional amendment of five words — “There shall be open borders.”

Bartley, who told colleague Peter Brimelow, “I think the nation-state is finished,” wanted U.S. borders thrown open to people and goods from all over the world. To Bartley and his acolytes, what made America one nation and one people was simply an ideology.

But what was silly then is suicidal today.

Whatever one may think of Trump’s talk of building a wall, does anyone think the United States is not going to have to build a security fence to defend our bleeding 2,000-mile border?

Given the huge trade deficits with China, Japan, Mexico and the EU, the hemorrhaging of manufacturing, the stagnation of wages and the decline of the middle class, does anyone think that if Trump is turned back, the GOP can continue on being a free-trade party financed by the Beltway agents of transnational corporations?

Absent some major attack on the homeland, do our foreign policy elites believe the American people would support new U.S. interventions to defeat, occupy and tutor Third World nations in liberal democracy?

Trump is winning because, on immigration, amnesty, securing our border and staying out of any new crusades for democracy, he has tapped into the most powerful currents in politics: economic populism and “America First” nationalism.

Look at the crowds Trump draws. Look at the record turnouts in Republican caucuses and primaries.

If Beltway Republicans think they can stop Trump and turn back the movement behind him, and continue on with today’s policies on trade, immigration and intervention, they will be swept into the same dustbin of history as the Rockefeller Republicans.

America is saying, “Goodbye to all that.”

For Trump is not only a candidate. He is a messenger from Middle America. And the message he is delivering to the establishment is: We want an end to your policies and we want an end to you.

If the elites think they can not only deny Trump the nomination, but turn back this revolution and re-establish themselves in the esteem of the people, they delude themselves.

This is hubris of a high order.

via Zero Hedge http://ift.tt/1LF5qpR Tyler Durden

Yesterday we explained why according to Bank of America, despite the big equity squeeze Treasurys refuse to move lower, and in fact have continued to drift higher in price. We also noted that according to a Reuters blurb, Guggenheim CIO Scott Minerd said on Monday that he sees the 10-year Treasury note yield falling to 1 percent, perhaps even lower, before year-end.

Below are key excerpts from his just released argument for why the best trade of the year will be to buy 10Years in May, or any other month for that matter, and go away until December 31.

From The Great Recession Scare of 2016

Markets are in a funk over the risks to the global economy—and there are many—but I believe future market historians will refer to the current period as “The Great Recession Scare of 2016.” At this point, market dynamics are playing out the way our macro research predicted over one year ago—that collapsing oil prices would lead to an increase in defaults in energy credits sometime in the first or second quarter of 2016, and that there would be a sympathetic widening in other high-yield sectors outside of energy. Our research tells us that beyond this spike in energy defaults fundamental conditions are copacetic, yet the markets and policymakers are reacting as if recession or full-blown financial crisis were at the gates, if not already upon us.

For example, the decline in breadth, as exhibited by one of my most reliable indicators, the New York Stock Exchange Advance/Decline line, continues to make new cyclical lows, signaling that equity prices have further to fall. Our analysis indicates that the S&P 500 could drop to a range of 1,600 to 1,650 and the Nasdaq to 3,800 before we find a bottom. A fitting analogy for the recent rollercoaster in equities may be the sharp series of rallies we experienced in 2007 and 2008 before the market ultimately capitulated. At the same time, investors should remember that such a market decline does not necessarily portend a recession. For those of us who remember, after the market crash of October 1987 the next U.S. recession was still two years away, creating a great buying opportunity. I could say the same for the periods following similar market declines in 1994 and 1998.

Central banks around the world, reacting to the same recessionary fears, are likely to cause long rates to sink materially lower than where we are today. I see the 10-year Treasury note falling to 1 percent, perhaps even lower, before year-end. According to technical analysis, the current target bottom for the 10-year Treasury note is 28 basis points! That may seem like voodoo, but technical analysis provided key insight to our macroeconomic team a year ago when we called for oil to hit $25 per barrel back when it was trading at $60.

A barrel of oil at $25 or 10-year Treasurys yielding less than 50 basis points may seem like crazy numbers, but so do the negative interest rates that we are already seeing in Europe and Japan. As low as rates are today, I expect further declines in short-term and long-term rates, both in Europe and Japan, and that ultimately the Bank of Japan and the European Central Bank will take their respective overnight rates to as low as -100 basis points. Such an event would likely cause Germany’s 10-year bund to trade at around -50 basis points. When you consider that the current spread relationship between bunds and Treasurys is about 150 basis points, you can easily see why the U.S. 10-year note at 1 percent is not that farfetched. Given that U.S. Treasurys have traded at yields lower than bunds, it is not hard to imagine that the 10-year note could yield less than 1 percent if the bund were to reach -50 basis points.

More in the full note

via Zero Hedge http://ift.tt/1LF4l1c Tyler Durden

Yesterday we explained why according to Bank of America, despite the big equity squeeze Treasurys refuse to move lower, and in fact have continued to drift higher in price. We also noted that according to a Reuters blurb, Guggenheim CIO Scott Minerd said on Monday that he sees the 10-year Treasury note yield falling to 1 percent, perhaps even lower, before year-end.

Below are key excerpts from his just released argument for why the best trade of the year will be to buy 10Years in May, or any other month for that matter, and go away until December 31.

From The Great Recession Scare of 2016

Markets are in a funk over the risks to the global economy—and there are many—but I believe future market historians will refer to the current period as “The Great Recession Scare of 2016.” At this point, market dynamics are playing out the way our macro research predicted over one year ago—that collapsing oil prices would lead to an increase in defaults in energy credits sometime in the first or second quarter of 2016, and that there would be a sympathetic widening in other high-yield sectors outside of energy. Our research tells us that beyond this spike in energy defaults fundamental conditions are copacetic, yet the markets and policymakers are reacting as if recession or full-blown financial crisis were at the gates, if not already upon us.

For example, the decline in breadth, as exhibited by one of my most reliable indicators, the New York Stock Exchange Advance/Decline line, continues to make new cyclical lows, signaling that equity prices have further to fall. Our analysis indicates that the S&P 500 could drop to a range of 1,600 to 1,650 and the Nasdaq to 3,800 before we find a bottom. A fitting analogy for the recent rollercoaster in equities may be the sharp series of rallies we experienced in 2007 and 2008 before the market ultimately capitulated. At the same time, investors should remember that such a market decline does not necessarily portend a recession. For those of us who remember, after the market crash of October 1987 the next U.S. recession was still two years away, creating a great buying opportunity. I could say the same for the periods following similar market declines in 1994 and 1998.

Central banks around the world, reacting to the same recessionary fears, are likely to cause long rates to sink materially lower than where we are today. I see the 10-year Treasury note falling to 1 percent, perhaps even lower, before year-end. According to technical analysis, the current target bottom for the 10-year Treasury note is 28 basis points! That may seem like voodoo, but technical analysis provided key insight to our macroeconomic team a year ago when we called for oil to hit $25 per barrel back when it was trading at $60.

A barrel of oil at $25 or 10-year Treasurys yielding less than 50 basis points may seem like crazy numbers, but so do the negative interest rates that we are already seeing in Europe and Japan. As low as rates are today, I expect further declines in short-term and long-term rates, both in Europe and Japan, and that ultimately the Bank of Japan and the European Central Bank will take their respective overnight rates to as low as -100 basis points. Such an event would likely cause Germany’s 10-year bund to trade at around -50 basis points. When you consider that the current spread relationship between bunds and Treasurys is about 150 basis points, you can easily see why the U.S. 10-year note at 1 percent is not that farfetched. Given that U.S. Treasurys have traded at yields lower than bunds, it is not hard to imagine that the 10-year note could yield less than 1 percent if the bund were to reach -50 basis points.

More in the full note

via Zero Hedge http://ift.tt/1LF4l1c Tyler Durden

Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

We are searching for an insight. Each time we think we see it… like the shadow of a ghost in an old photo… it gets away from us. It concerns the real nature of our money system… and what’s wrong with it. Here… we bring new readers more fully into the picture… and try to spot the flaw that has doomed our economy.

Let’s begin with a question. After the invention of the internal combustion engine, people in Europe… and then the Americas… got richer, almost every year. Earnings rose. Wealth increased. Then in the 1970s, after two centuries, American men ceased making progress.

 

1859: Frenchman Etienne Lenoir builds a  double-acting, spark-ignition engine that can be operated continuously. The internal combustion engine is born.

 

Despite more PhDs than ever… more scientists… more engineers… more capital… more knowledge… more Nobel Prizes… more college graduates… more machines… more factories… more patents… and the invention of the Internet… after adjusting for inflation, the typical American man earned no more in 2015 than he had 40 years before.

Why? What went wrong? No one knows. But we have a hypothesis. Not one person in 1,000 realizes it, but America’s money changed on August 15, 1971. After that, not even foreign governments could exchange their dollars for gold at a fixed rate.

The dollar still looked the same. It still acted the same. It still could be used to buy booze and cigarettes. But it was flawed money. And it changed the whole world economy in a fundamental way… a way that is just now coming into focus.

 

Honest Money

The Old Testament tells us that God chased Adam and Eve from the Garden of Eden with this curse: “By the sweat of your brow, you will earn your food until you return to the ground.” From then on, you worked… you earned money… you could buy bread. Or lend it out. Or invest it.

Dollars – or any form of real money – were compensation… for work, for risk taking, for accumulating knowledge and capital. Money is information. It tells us how much reward we’ve earned… how much things cost… how much profit, how much loss, how much something is worth… how much we’ve saved, how much we’ve spent, how much we need, and how much we’ve got.

 

A “Flying Nike” gold distater of Alexander the Great (336-323 BCE). Ultimately, only a market-chosen money can be sound. The market chose gold as the most marketable commodity. There were no meetings or committees deciding on this, it happened spontaneously – governments simply usurped it.

 

Money doesn’t have to be “hard” or “soft” or expensive or cheap. But it has to be honest. Otherwise, the whole system runs into a ditch. But the new money was a phony. It put the cart ahead of the horse. This was money that no one ever had to break a sweat to get. It was based on credit – the anticipation of work, not work that had already been done.

Money no longer represented wealth. It now represented anti-wealth: debt. So, the economy stopped producing real wealth.  The Fed could create money that no one ever earned and no one ever saved. It was no longer the real thing, but a counterfeit.

In this way, effort and reward were cut off from one another. The working man still had to labor. But it was the banker, gambler, speculator, lender, financier, investor, politician, or inside operator who made the money. And the nature of the economy changed. Instead of rewarding the productive Main Street economy, it rewarded insiders… and the financial sector.

 

Financial profits as a share of total domestic corporate profits – by the mid 2000ds it had increased to 40%. Something had clearly gone wrong – click to enlarge.

 

The penthouses of Manhattan and the summer houses of the Hamptons changed owners. Gone were the scions of Detroit factories and the titans of New York commerce. Gone were the people who had added to the wealth of the nation. In their place were the Wall Street hustlers… the people who moved money around… taking it from the people who made it and giving it to the financial industry, the money lenders, the insiders, and the Deep State.

This process is misunderstood. It is thought that Wall Street greed and deregulation caused the shift. But Wall Street was just as greedy as it always was… And financial regulations increased dramatically throughout the entire period.

 

Financial sector profits and economic productivity – a suspicious inverse correlation – click to enlarge.

 

It was not human nature that had changed; it was the money. And it changed everything.

via Zero Hedge http://ift.tt/1VCNX70 Tyler Durden

On Tuesday, multiple media outlets jumped at the opportunity to report that China has built radar facilities at Cuarteron Reef, Beijing’s southern-most South Pacific sandcastle.

“New radar facilities being developed in the Spratlys, on the other hand, could significantly change the operational landscape,”  Gregory Poling of CSIS’s Asia Maritime Transparency Initiative said, explaining why the radar installations are actually a bigger deal than the deployment of HQ-9 surface-to-air missiles on Woody Island.

Here’s a bit more from Poling:

Construction of facilities at Cuarteron seems nearly complete and the artificial island now covers about 52 acres (211,500 square meters). Two probable radar towers have been built on the northern portion of the feature, and a number of 65-foot (20-meter) poles have been erected across a large section of the southern portion. These poles appear to be a high-frequency radar installation, as was first speculated on The Diplomat, which would significantly bolster China’s ability to monitor surface and air traffic across the southern portion of the South China Sea. In addition to these radar facilities, China has constructed a buried bunker and lighthouse on the northern portion of the feature, a number of buildings and a helipad in its center, communications equipment to the south, and a quay with a loading crane on the western end of the outpost.

 

Poling goes on to say that Beijing has likely also put radar installations on other islands in the Spratlys, but that, as it turns out, isn’t the big story.

Just moments ago, GOP mouthpiece Fox News said China has now deployed fighter jets to Woody Island, where imagery from ImageSat International (ISI) showed two batteries of eight surface-to-air missile launchers in place earlier this month. 

“Chinese Shenyang J-11s (“Flanker”) and  Xian JH-7s (“Flounder”) have been seen by U.S. intelligence on Woody Island in the past few days, the same island where Fox News reported exclusively last week that China had sent two batteries of HQ-9 surface-to-air missiles while President Obama was hosting 10 Southeast Asian leaders in Palm Springs,” Fox reports, gleefully. “The dramatic escalation cames minutes before Secretary of State John Kerry was to host his Chinese counterpart, Foreign Minister Wang Yi, at the State Department.”

“There is no difference between China’s deployment of necessary national defense facilities on its own territory and the defense installation by the U.S. in Hawaii,” Foreign Ministry spokeswoman Hua Chunying said Monday, in an effort to play down the buildup on Woody.

China raised eyebrows earlier this year when Beijing landed civilian aircraft on a 10,000 foot airstrip constructed atop Fiery Cross Reef.

We’d love to be a fly on the wall for Kerry’s imminent meeting with Wang, who we’re sure will tell America’s top diplomat what he told the Western media last week: Don’t mind the missiles and the warplanes, focus on the lighthouses.

*  *  *

For those who missed it, here are the images from Woody which depict the SAM deployment:

via Zero Hedge http://ift.tt/1UlkaRG Tyler Durden

Last year, Kyle Bass – and a few other enterprising members of the 2 and 20 crowd – had an idea.

Changes in patent laws implemented in 2012 allow individuals to challenge patents for the bargain price of just $23,000. Apparently, the thinking was that there were too many patents being awarded and making the challenge process easier would go some ways toward ameliorating the “problem.” As we put it last March: “That makes sense. When too many people are inventing things, one way to stop such nonsense is to make suing inventors cost far less than it used to.”

Not surprisingly, the new process is used far more frequently than the old way of going about things which required the party contesting the patent to file a civil suit.

Now clearly, $23,000 is not a lot of money for a hedge fund with substantial AUM which means managers could theoretically challenge as many patents as they wanted to without incurring material costs. A simple strategy was born: challenge a drug company’s patent and then short the equity which would invariably tank if said patent is invalidated.

That sounds shady but the likes of Bass claim the patents drive drug costs higher and keep them there. “The political debate has moved on to drug pricing,” he says, “but the key enabler of drug companies’ ability to raise prices ad infinitum is the fact that the US government grants a monopoly, and that monopoly is maintained by the US patent office.”

A long-running biotech rally driven in part by M&A tied to specialty drug companies drove valuations into the stratosphere at one point, making short bets all that much more attractive.

Well as it turns out, all of this was easier said than done because as FT reports, “Bass has returned most of the $700m he raised last year for a high-profile campaign against pharmaceuticals companies and their drug patents.”

“More than half of Hayman’s challenges have been thrown out even before getting a hearing at the US Patent and Trademark Office,” The Times continues. Most of the important challenges “were rejected at the door,” RBC’s Michael Yee says, adding that the ones that were accepted “didn’t matter.”

So just as Martin Shkreli can no longer go massively long insolvent biotechs and inflate the value of his holdings by driving up the price of a drug and subsequently pulling the borrow, it looks like Bass’s plan to go massively short and then pull the patent rub from beneath companies’ feet isn’t going to work anymore either. 

Of course Bass can’t exactly abandon the strategy now, lest everyone would see the move as proof that his plan had nothing to do with lowering drug prices and everything to do with his short positions. 

“We are not stopping,” he says, noting that he still has “all the capital he needs to pursue everuthing to its logical conclusion at the patent office.”

When it comes to “logical conclusions,” he probably should have known last year that the government wasn’t likely to let him make a killing by filing $23,000 patent challenges one at a time. 

That’s ok. If his China thesis is even half right he’ll make enough money for a dozen lifetimes. 

Ironically, the following headline came across the wires this afternoon: “Bass Wins Right to Challenge Pozen Drug on Vimovo Arthritis Drug.”

via Zero Hedge http://ift.tt/1QwNGhr Tyler Durden

Bill Gates is supporting backdoor FBI access to iPhones.

Is anyone surprised?

Microsoft programmers have allowed NSA backdoors in all Windows software since 1999 or before.

And while Microsoft sometimes pretends that it's fighting for privacy, it has long been a direct partner of the NSA, helping government at every opportunity.

via Zero Hedge http://ift.tt/1p22PS8 George Washington

Two weeks ago, shortly before noting that Venezuela’s CDS is now at the same level where Greece was 3 months before its default, we wrote that as a result of a recently implemented gold swap with Deutsche Bank, Venezuela was preparing to liquidate its remaining gold holdings (ostensibly temporarily, if only on paper) in order to pay down its upcoming debt maturities.

As it turns out Venezuela has already started moving much of its gold reserve to Europe where it will be located closer to swap-provider and ultimate custodian, and liquidator, Deutsche Bank, by way of Switzerland. According to BullionStar, Switzerland has imported a net of 35.8 tonnes of gold from Venezuela in January 2016.

And so, the gold which deceased Venezuela leade Hugo Chavez so painstakingly tried to collect from Europe, is just a few short years later, about to make its way back to where it came from.

More from BullionStar’s Koos Jansen

Venezuela Exported 36t Of Its Official Gold Reserves To Switzerland In January

This unusual high tonnage must be gold from the central bank of Venezuela – Banco Central de Venezuela (BCV) – that has been swapping metal with banks or simply sold it in the open market. Remarkably, after Venezuela repatriated 160 tonnes in official gold reserves from 25 November 2011 until 30 January 2012, it started to slowly export this gold to the world’s largest gold trading and refining hub, Switzerland, in 2015. How much unencumbered official gold reserves Venezuela has left is unknown.

Venezuela’s economy is in dire straits. Adding to failing economic policy by the government the country gets nearly all of its export revenue from oil, of which the price has declined roughly 70 % since 2014. Venezuela’s foreign exchange reserves are dwindling fast, from $24.2 billion dollars in February 2015 to $14.8 billion dollars in November 2015, while Inflation is said to be triple-digit and Credit Default Swap (CDS) data shows that traders see a 78 % chance on default, according Reuters. In an effort to avoid catastrophes the BCV has a very strong motive to employ its official gold reserves.

The 35.8 tonnes of gold in question that arrived in Switzerland in January 2016 must be sourced from the vaults of BCV in Caracas, because Venezuela has no significant gold mine output, according to the US Geological Survey its annual production stands at approximately 12 tonnes, and its citizenry is unable to sell such tonnages. If we look at historic cross-border trade we find that gold export from Venezuela to Switzerland commenced in 2012 with 4 tonnes, followed by 10 tonnes in 2013, 12 tonnes in 2014 and 24 tonnes in 2015. It’s possible the shipments in 2012, 2013 and 2014 were largely sourced from Venezuela’s mine output, but it’s impossible the shipments in 2015 and 2016 were not sourced from the BCV.

From the data provided by Switzerland’s customs department we can estimate the purity of the gold traded by using the average monthly gold price and subsequently compare the weight to the value disclosed in the reports. In the chart below we can see that until May 2013 the gold Venezuela was exporting to Switzerland was roughly 80 % pure, this could have been for example doré bars from mines or coin bars from the BCV, while starting from December 2013 the shipments were roughly 99.5 % pure, suggesting the gold came predominantly from BCV in London Good Delivery bars or US Assay office bars.

Chart 1. Non-monetary gold import Switzerland from Venezuela, the purities are estimates.

 

* * *

Reuters wrote Venezuela’s gold involved in swaps does not enter the
market. I beg to differ. Normally, in a swap the gold is sold spot from
the client to the dealer in exchange for dollars, while both parties
agree to reverse the purchase at a future date at a fixed price. If the
gold is physically moved during the swap depends on several factors.
Because Venezuela had repatriated 160 tonnes of gold in 2011/2012 this
metal left the London Bullion Market Association’s chain of integrity. Hence, Gutierrez
stated no bank is going to take gold collateral that’s held in Caracas.
When BCV’s 50 tonnes stored in London were already on swap with
Citibank, it was forced to bring gold to the bullion banks when it
needed additional dollars. The gold moving to Switzerland is an example.

It’s not possible to trace exactly how much gold BCV has exported for
swap deals, or potentially sales, through foreign trade statistics.
Official gold reserves are monetary gold, which is exempt from being disclosed in foreign trade statistics (click this
link for a detailed analysis on how monetary and non-monetary gold
transfers are recorded in foreign trade statistics and in balance of
payments around the world). Whenever BCV chooses to ship any of its gold
abroad, for swaps or sales, there are two options with respect to
foreign trade statistics, (i) the monetary gold is exported abroad, or
(ii) the monetary gold is demonetized in Venezuela and exported abroad.
Only in the latter option the gold would show up in foreign trade
statistics, as such data solely records movements in non-monetary gold.
For all clarity, gold can leave the London Bullion Market Association’s
chain of integrity although still being monetary gold, these are
separated classifications.

From all sources and evidence presented above actually I think both
options are explored. We can clearly see demonetized gold going to
Switzerland, but there are also hints monetary gold is exported
abroad. Foreign trade statistics by the UK, Switzerland and Hong Kong –
the major gold trading hubs – have not shown any gold import from
Venezuela reflecting BCV’s declining reserves in March and April 2015 or
export in July 2015, meaning Venezuela had probably exported metal invisibly
as monetary gold. Needless to say, if BCV would sell any of its gold
reserves directly to a fellow central bank, for example the People’s
Bank Of China, the related shipments would never show up in foreign
trade statistics.

From all information at my disposal I cannot conclude how much gold
BCV has on swap or unencumbered in the vaults in Caracas. Surely,
Venezuela its official gold reserves are not as much as the World Gold
Council portraits. According to the Council BCV still holds 361 as of Q4
2015, though the balance sheet at the BCV website
from November 2015 states “Oro monetario 69,147,656,000”, which is
worth $11 billion US dollars at an official exchange rate of 0.16, and
roughly 296 tonnes of gold at a nine months rolling average
gold price of $1,152.68 an ounce (which is how BCV gold is valued,
pointed out by Manly). The 296 tonnes will not be fully unencumbered as
bullion banks offer swaps while the gold remains on the client’s balance
sheets (/double counting).

Obviously Venezuela is in a tight spot. The country is trying
desperately to survive on its last reserves and the bullion banks seem
to offer shark deals. How long this can go on is anyone’s guess.

via Zero Hedge http://ift.tt/1ozPkby Tyler Durden